Voice Over Internet Protocol (VoIP) is an emerging technology in the VOIP Telecommunications industry that allows people to have long-distance voice communications and multimedia sessions via the Internet. VOIP telecommunications merchants participate in an industry that reached $16.5 billion in Europe and $9 billion in the US according to Statista, and is expected to grow to $46.5 billion in Europe and $23.5 billion in the US by 2024.
With many businesses seeking to streamline their communications infrastructure by migrating from traditional phones to VOIP, VOIP is clearly the communications technology of the future.
Despite this enormous potential, VOIP merchants often face difficulty when applying for services from traditional banks, e-processors and lending institutions. The reason is that the VOIP industry is considered high-risk by most banks and e-commerce service providers.
The Trouble with VOIP
VOIP’s popularity has to do with its efficiency and affordability. VOIP service providers offer inbound and outbound international and unlimited domestic calls for a flat monthly subscription fee.
But just as the internet has facilitated communication and commerce, it has also provided an anonymity to customers that tends to allow the occasional abuse of merchants. The VOIP industry is one often characterized by high processing volumes and if often the ideal camouflage to those who would utilize services and then break terms of service and skip out on previously agreed upon payments. For this reason, the VOIP industry is characterized by excessive chargebacks and fraudulent transactions.
This places banks and e-processors in the difficult position of weighing the benefits of providing services to VOIP providers against the liabilities. One risk to banks and e-processors is being left on the hook for the outstanding debts left by chargebacks and fraudulent transactions. Merchants that fail to cover costs for excessive chargebacks and fold can leave online credit card processors facing heavy fines from banks and credit card companies.
To succeed, VOIP service providers need to partner with an online credit card processing service with a track record of dealing with high-risk merchants. SecureGlobalPay is the answer.
SecureGlobalPay specializes in providing online credit card processing solutions for merchants in traditionally high-risk industries. No matter the type or size of your company, SecureGlobalPay can help you thrive.
Applying for a VOIP Telecommunications merchant account
Apply online with SecureGlobalPay for a VOIP telecommunications merchant account today. Be prepared to submit the following items for review:
- A valid, government-issued photo ID (e.g., driver’s license, state/provincial ID, etc.)
- A bank attestation or void check
- Bank statements (3 months worth)
- Processing statements (3 months worth)
- SSN (Social Security Number) or EIN (Employer Identification Number)
- The URL to your secure, fully-operational website
Please note that your history of chargeback ratios must be under 2%.
E-commerce businesses must have a secure, fully-operational website.
Approval is not guaranteed. But with your application and the documentation above, SecureGlobalPay underwriters can approve your application within 48 hours. Apply now.
Evaluation criteria: VOIP merchant service accounts
Underwriters consider many factors when evaluating a merchant account application. Their main concern is ensuring that the applicant in question is running a legitimate business that operates within the law as well as the norms and ethics of its industry.
Businesses with a history of high chargebacks or credit card transaction disputes pose a risk, as do those with negative bank account balances, unpaid bills, a history of late payments or questionable credit scores. Online businesses that fail to post clear refund and privacy policies on their websites can also be considered high-risk.
- Merchants can maximize the likelihood of an approved application by:
- Paying all outstanding debts and bills
- Providing proof that you have some capital in the form of bank savings
- Ensuring a principal in the business has a sound credit history and nominate them to apply for the merchant account
Industry Categories for VOIP Merchants
Four-digit numeric codes known as Standard Industrial Classification (SIC) codes are common in the United States and many other countries for identifying businesses and their primary purposes.
VOIP companies are classified under the rubrics
- 4813: Telecommunications
- 7379: VOIP Networks
A complete SIC list is available via the US Department of Labor website.
A similar classification system known as NAICS (the Northern American Classification System) is a list of six-digit codes used by federal statistical agencies to classify business establishments. The classification system aims to gather, analyze, and publish statistical information about similar types of businesses and their impacts on the U.S. economy.
VOIP merchants fall under the classifications of:
- 517110: Wired Telecommunications Carriers
- 541519: VOIP networks
Visit the United States Census Bureau to view the complete NAICS code list.
SecureGlobalPay can provide a merchant account tailored to your business model. Recoup money lost by using processors like PayPal. Our easy online application process can set you on the right road today!
- No Application Fees
- Competitive rates
- No VISA/MasterCard Required
- Multiple Secure Payment Gateway Options
- LOW Rates and Fees
- No extensive credit checks